Ex-investigator says report changed

Officials provide input on AASD pay raise issue

August 4, 2013

A former investigator from the Department of the Auditor General who completed a report of the Altoona Area School District pay raise issue said the department's published report contradicted his findings.

The auditor general report was the final source of information on whether former Superintendent Dennis Murray acted wrongly in giving salaries to employees of the district.

The published report corroborated the school board's independent investigation finding that Murray had broken state law. But Michael Bolen, former investigator for the auditor general's Office of Special Investigations (OSI), was surprised to hear statements made in the final report.

The auditor general report accused Murray of violating Section 508 of the state school code, which requires that boards hold a vote on the fixing of salaries in a public meeting and that votes be documented in board meeting minutes.

"My understanding of school code is that the school board and solicitor are ultimately responsible," Bolen said.

In early June, when the school board's independent investigation placed blame on Murray for giving employees raises without board approval, Murray and his lawyers publicly stated that they spoke with an auditor general investigator who said his findings showed Murray was not wrong for giving the raises.

Murray and his counsel have been reeling since an unusual July 1 visit by Auditor General Eugene DePasquale to Altoona to personally give results of a report that accuses Murray of violating state laws regarding the salaries. It also states that Murray broke a section of school code that he said does not apply to him but to the school board.

"He [DePasquale] needs to correct that," Murray said in an interview in late July. "I don't think we've heard from them at all."

The auditor general report issued to the public states: "Our review found that during the past several years the district's superintendent granted a number of employee promotions, transfers and pay raises without the board voting on those changes at a public meeting and without the board's approval recorded in the meeting minutes. As a result, the superintendent violated the public school code, which requires that boards hold a vote on the fixing of salaries in a public meeting and that this vote be documented in the board meeting minutes."

Bolen said his only copy of his investigation was submitted in May to Harrisburg, and that was the last he saw of it.

"That's not a statement I wrote. There are revisions made, but that would be a total rewrite," he said. "That is not my writing."

Bolen and other employees of the Auditor General's Office of Special Investigations were furloughed because of budget cuts prior to the audit being released in June.

Eichelberger in contact

An open records request filed by the Mirror for investigation materials and interview notes was denied by the Auditor General's Office, but correspondence from the auditor general to state lawmakers was granted.

The only correspondence was with state Sen. John H. Eichelberger Jr., who stood behind DePasquale in Altoona when the report was released.

Weeks prior to that visit, Eichelberger read a June 6 Mirror article following the Altoona Area school board's findings of its investigation of Murray conducted by Philadelphia attorney Paul Cianci. The auditor general investigation was also being conducted as a result of concerns brought to light by board President Ryan Beers. In the story, Murray was quoted saying an auditor general investigator informed him that his actions were not illegal.

Eichelberger contacted the Auditor General's Office after reading the article. He was upset that Murray had apparently been informed of the investigation results.

"My concern was that the audit was being compromised. I was told the contrary the whole way. 'We can't give you any details,'" Eichelberger said. "If I'm someone waiting for results of the audit and read in the paper that one of their auditors spoke with Murray, I wasn't happy about that. They shouldn't be talking to people about this."

In an email dated June 6, a deputy auditor general for external affairs wrote to Eichelberger: "I look forward to meeting with you tomorrow morning to give you an update on the Altoona Area School District Audit. ... The Dept. of the Auditor General's audit is not yet complete and the report has not yet been shared outside of our office."

On June 7, Eichelberger met with auditor general staff and learned the report information had been shared with Murray's lawyers.

"They acknowledged it was inappropriate," Eichelberger said. "They said 'What we can tell you is this report is not finished.'"

Eichelberger added, "We talked about the audit, the problem, the situation, 'How soon are you guys going to be done.' What is the story with this guy [Bolen]?"

Attorneys receive

verbal summary

Reed Smith attorney Gene Connors said the law firm was given a verbal summary of the results after the OSI investigation had been completed.

"The source wasn't doing anything wrong," Connors said. "This isn't [an Edward] Snowden situation. He offered to tell us the findings and offered to share those same findings with the school board."

Bolen said he's probably been called a disgruntled employee, and he knows it.

"I didn't expect anything less from them," he said. "I was a 24-year employee with the auditor general with nothing but stellar reviews."

He said he's worked with the agencies, including the FBI and state police in Allegheny County, adding, "I have a very good reputation with them all."

"I probably gave them [Murray's attorneys] the gist of the findings," Bolen said. "It's something I've done in the past in discussions with subjects. The report was done. To me, it wasn't anything so earth-shattering I could not discuss it."

Bolen said he spoke with Murray's attorneys after he found out he was being furloughed in late May. He said he did not give Murray's attorneys a copy of the report. Bolen completed the report. Its next destination would have been to the Bureau of School Audits. The audit states testing related to the salary issues were jointly done by auditors and the OSI.

"We had the report finalized as far as our office was concerned," Bolen said. "The Bureau of School Audits did some payroll testing. They pulled a certain number of payroll and checked it against the contract and pay scale. They did do it as a result of the citizen's inquiry [made by Beers]."

Release of information concerned senator

After reading that Murray had information from the investigator, Eichelberger said he was "concerned" Murray's lawyers could be influencing the report. Weeks later, Murray's lawyers became suspicious that Eichelberger was influencing the report to place blame on Murray.

Prior to DePasquale's visit to Altoona, Reed Smith attorney Kyle Bahr called the Auditor General's Office to check for a release update. Bahr and Murray's other Reed Smith lawyers, Efrem Grail and Connors, said the auditor general staff informed them there would be no report of the pay raises included in the routine audit that was performed of all districts in the state.

A week later when the audit was released, Murray was faulted for the raises.

Eichelberger denies any personal involvement with the audit report.

"I was outraged that somebody was talking when they weren't supposed to," he said. "Aside from that, what they did with the audit - I had no idea until I read it."

Eichelberger said he received the audit the same day as the school district, at that point he said it was available to the public with an open records request.

Senator denies

special treatment

Eichelberger said the school board requested him to spur the Auditor General's Office to complete its report and that he did not give the school board treatment that he would not have given any other group of constituents who requested help with state agencies.

Eichelberger denies having any influence on DePasquale.

"He's a Democrat," Eichelberger said. "That doesn't make him a bad guy."

His relationship with Murray, Eichelberger said, was no different from his relationship with any school superintendent, which wasn't great - but not personal, either.

"Initially, I tried to help them [schools] out a lot," he said. "In the last couple years, they haven't been happy with me because of our state budget."

Eichelberger denied a suggestion that the pay-raise scandal would help him achieve a political goal. He said he is more critical of school performance than spending at Altoona Area.

"All taxpayer money is important, but to take this sum of money [he estimated at tens of thousands of dollars], and bring up they misused $70,000, that would be a weak argument for me compared with the millions of dollars schools receive," he said.

Senator blames Murray

Eichelberger remains critical of Murray.

"He broke the law," he said. "He should acknowledge that."

However, Section 508, regarding requirements for a majority board vote and for the recording of votes, applies to school boards and solicitors but not superintendents, Murray's lawyers said. Bolen also supports that conclusion.

Bolen picked up the investigation after another investigator was fired in February, he said. Prior to that, another investigator had completed a documented interview with Beers.

"His side of the story was read in detail," Bolen said.

Bolen's part of the investigation included interviewing Murray, former board members Jim Walstrom and Ticky Hendricks and the employees who received raises.

Bolen said Hendricks and Walstrom told him salaries were discussed in executive session.

"Hendricks was adamant that salaries were discussed in executive session," he said.

Walstrom couldn't recall, he said.

"It wasn't documented in minutes, but salaries were discussed in executive session and included in budget documents approved by the board, is what Dr. Murray told me and one board member," Bolen said.

Budgeting money

not enough

However, the board budgeting for salaries is not the same as approving an expenditure, said Pennsylvania School Boards Association Chief Legal counsel Emily Leader.

"There's been an ongoing, persistent position that some administrators take that if it is budgeted, you can spend it," she said.

"I hear it half a dozen times or more each year. I don't know if they are hearing it from counsel. There may be some lawyers who believe it, but I've never heard any who do. Section 508 says the school board fixes salaries of appointees, and it requires a recorded vote. They don't fix it by budgeting a pool of money."

Jim Buckheit, executive director of the Pennsylvania Association of School Administrators, concurred with Leader.

"I don't think that works," he said. "The board must vote on it."

Buckheit noted, however, that multiple interpretations of school code are possible.

"Section 508 and much of school code is not granular enough," he said. "It has a sort of vague language. You can interpret things differently, and there is no policy direction from the Pennsylvania Department of Education."

Attorneys say board at fault

In a letter to the auditor general sent July 9, Connors demands errors in the audit report to be corrected and defends Murray's apparent unawareness of school code.

"The audit report ... ignores that each year, as part of the budget process, the AASD board does and did approve the lump sum of money to be spent collectively for all administrative staff salaries. If those board procedures failed to satisfy PSC section 508 and the Pennsylvania Sunshine Act, the fault lies with the AASD Board, not the superintendent."

The audit states Murray contends raises were discussed in executive session and that solicitor Dave Andrews never told him raises had to be approved in a public meeting.

However, the school board's investigation "confirmed that when salaries were discussed in executive session, I always reminded the board that they had to be voted on in a regular public board meeting," Andrews said.

"The point here is that these salary increases in dispute given by Dr. Murray were not discussed in executive session," Andrews said. "There have been no findings by Levin's report or the Auditor General that they were."

Bolen's findings not included

The auditor general's office said it did not include Bolen's findings in the final report because his responsibility was to investigate whether there was criminal action. Auditor General Executive Deputy Chief Counsel Victoria Madden wrote in a July 30 response letter to Connors that the former Office of Special Investigations' primary function was to obtain evidence concerning "criminal wrongdoing."

"The finding in the audit report did not relate to criminal wrongdoing but rather to technical violations of the code ... Any possible OSI findings that may have resulted from the terminated OSI investigation were not incorporated into the auditors' report and have no direct bearing on the auditor's finding in the audit report."

Madden substantiated findings of the final report by pointing to Section 508 as well as another section that relates to compensation plans for school administrators. On Friday, Connors rebuked Madden in another letter, calling Madden's discussion of school code "irrelevant" and her reasoning for not including Bolen's report "alarming."

He pointed a July 2012 report on the Ligionier Valley School District that dealt with the same technical, noncriminal violation of school code as Altoona Area's investigation.

"Your own publicly available documents contradict your assertions that OSI only addressed criminal wrongdoing. ... Beyond that, the assertion is both unbelievable and ridiculous on its face. ... Why on earth would the [auditor general's office] ignore the work and impartial factual findings of the OSI, the only agency appointed to conduct its investigations?"

Murray's lawyers continue to demand OSI findings on the Altoona Area investigation to be made public and for the audit to be changed. State Department of Education spokesman Tim Eller said allegations of school code violations generally go to court. Andrews said from the board's perspective, the issue is done.

"This matter should be considered concluded now," Andrews said. "Dr. Murray has retired. The district has not asked for money back from him or anyone affected by the raises. Dr. Murray is receiving an additional payment of $220,000 for accrued vacation and sick time, and the board has not challenged that payment.

"Dr. Murray was paid his full salary until the date of retirement and will receive a full pension. It is time for the district and community to move on and have the focus of the school district get back to educating its students."